The Peter Principle

Posted by Degs on September 8, 2012, 10:38:31 PM

Another week another "Officially Linked Partnership" for Liverpool F.C. and its Managing Director Ian Ayre. This week the new sponsors are Garuda Airlines of Indonesia and the title bestowed upon them is Global Official Airline for Liverpool Football Club. Unveiled alongside the European Cup, a Liverpool shirt emblazoned with the company name, 35 corporate tickets for a Category A game, Ian Rush in tow, and Ian Ayre accommodating his Indonesian guests by wearing an equally abstract shirt as them, this was a sales pitch of Don Draper proportions.

When you visit Anfield there is a length of hoarding that runs alongside the pitch, it bears names such as Standard Charter, Warrior, Chevrolet, Thomas Cook, as well as minor partners brought in under the stewardship of Ian Ayre.  Amid a swirl of reports that he is days away from sacking, that a position will be created above him, Ayre has added another name to his board.  This was why he was brought to Liverpool, he's an Accounts Man and in this role he has thrived.

When Ayre came into Liverpool the commercial side of the organisation was run by a similar amount of staff, with the same structure, as it had been before the era of Official Airline, Car, and Bogroll partnerships.  We had fallen behind the likes of Manchester United in acquiring the easy money that came with plastering a plane with a Liverbird on the side.  When asked what he immediately did upon arriving Ayre said:

If you want to capitalise on opportunities and provide the right things for the fans, you need people who understand what makes this club special and unique, and what it is that makes people - either in Liverpool or in Singapore - support the club. So I hired six new senior managers in six different disciplines. Once we'd brought these people in to champion their different areas, we could start bringing all these elements back in-house.

The first hire was on the customer relationship management side. A club like Liverpool has an enormous number of connections with its fans every day - online, by phone, at supporter clubs - but nobody was capturing that data and using it to establish a two-way relationship with them. And if you don't know who your customers are, or where they are, how can you best serve them and make sure there are things for them to buy and enjoy? So we created something called The Single View of the Fan, which means that if you interact with the club in any capacity, we capture that data and create an individual identity for you. There's nothing worse as a consumer than being bombarded with information about stuff you have no interest in. My dad's 70, so he doesn't want to get an email about the new home shirt, because he's not going to buy it. Well actually, he doesn't want to get an email at all.

We also bought out our digital media joint venture (JV). Sponsorship was being sold by Granada as part of the JV, so we brought that back in-house too. And more recently we've also extracted ourselves from our JV on the retail side. So essentially, we were more in control of our own destiny. Since then, every single element of our commercial business has grown. Our revenues are up by 85% over the period, including one of the biggest shirt sponsorship deals in football.

The full interview is a good read an available here:

This is a man who knows his field, the fact he was doing it for a football club was completely irrelevant, with results such as an 85% increase in commercial revenue Ayre was the golden boy - he was helping to make the club self-sufficient, he had battled with Hicks and Gillete and his only black mark was the horrible foreshadowing that came with his involvement in the Benitez sacking.

Ayre is now being lambasted from pillar to post, after such amazing results commercially why is there serious talk of him being sacked just 2 years later?  For me the answer is simple: The Peter Principle.

The Peter Principle is a belief that in an organization where promotion is based on achievement, success, and merit, that organization's members will eventually be promoted beyond their level of ability. The principle is commonly phrased, "employees tend to rise to their level of incompetence." In more formal parlance, the effect could be stated as: employees tend to be given more authority until they cannot continue to work competently.

The horrible reality is now dawning that when it comes to footballing decisions Ian Ayre has risen to his level of incompetence. His hand in the Rafa Benitez sacking, his silence during the Suarez/Evra affair, and now the absolute and utter failure of transfer deadline day has seen Ian Ayre's frailties exposed.  While Ayre can pitch the club, can woo investors and can make cash tills ring, when he is faced with a football decision he is found lacking.  Ayre may not have had any choice but to drive away from Melwood early on Friday evening, he may have had his hand's tied by Tom Werner/FSG but that he allowed Andy Carroll to leave without a ready replacement already in the door shows his naivety in dealing with "Football People". Fulham aren't flogging plane rides, don't expect them to give you a reach around.

Ian Ayre should not be in a position where his job has become untenable because of footballing decisions. If he does leave we lose a lifelong red and a Scouser able to tie up lucrative commercial deals for the club, we do so because we internally promote based on success in unrelated fields.  The poor lad who mops the toilets in 105 thinks he's turning out as a left-winger next week because John Henry said the urinals were spotless.

What is needed for advancement in the future is to bring in an experienced C.E.O. who can bridge the gap between Boston and Liverpool and who has knowledge of the footballing world. It will be interesting to see how new Man City C.E.O. Ferran Soriano fares as he seems to have had the same "increasing sponsorship" reputation at his former club Barcelona that Ayre had before his move upwards. 

In the midst of this shitstorm I feel sorry for Ian Ayre. He could hardly knock-back such a huge job and now because of his zero amount of experience in the field he has been thrust into his entire Liverpool career hangs in the balance.  If lessons have been learned then a footballing man will be brought in soon, above Ian Ayre.

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